Jason Walker

Internet Marketing

Posted on 30th June 2011 at 06:37.

Google has finally come clean and admitted what was long suspected, that the US Federal Trade Commission has opened an antitrust investigation into its search and advertising practices.

It comes as no surprise that the search engine giant has denied the allegations: it says it respects ‘the FTC’s process’ but believes its own practices will more than match up to scrutiny. The SEC filing was served with a subpoena last week and a notice of civil investigative demand from the commission.

The internet giant also acknowledged the investigation in its own blog post where it justified its search practices. Google fellow, Amit Singhal, maintained that any concerns the FTC might have over Google’s behaviour came as something of a surprise to the company as it had always ‘focused on putting the user first.’ Without a hint of irony, he also added that Google’s search practices were, and always had been, transparent, which will probably come as an even bigger surprise to anyone involved in the search industry. Google may be many things, but ‘transparent’ isn’t a quality that immediately springs to mind.

So what is this investigation about? Well, the FTC is just the latest body to get embroiled: there’s already an ongoing EU investigation into Google’s so-called anti-competitive behaviour following three complaints filed by other search engines – the UK-based Foundem being the most vociferous. Foundem’s major beef is with Google’s universal search setup, which inserts links from other Google services, like Google Maps and Google Product Search, into rather prominent positions in the search results. In effect the UK-based company is complaining that Google’s search results are turning into little short of a marketing channel for its own services, in much the same way as Microsoft unfairly bundled its own applications with windows. Foundem believes this is anti-competitive, particularly as Google already controls an estimated 85% share of the market anyway.

Foundem’s other gripe lies in the manner in which Google handles manual interventions and appeals on its search engine.

It is particularly concerned about how little information the search giant discloses about its practices. This is in spite of Singhal’s protestations of ‘transparency’. Spokeswoman, Shivaun Raff, explained:

“the half of our complaint detailing the anticompetitive power of Google’s exclusionary penalties is as much about the systemic failures of Google’s manual review process as it is about the legitimacy of the penalty algorithms themselves.”

“You have an overwhelmingly dominant search engine. If you add to that that search engine’s ability to apply discriminatory penalties – they’re discriminatory because some services are manually rendered immune through ‘whitelists’ – and you add the ability of that search engine to preferentially insert its own services at or near the top of the search results, all of that adds up to an unparalleled and unassailable competitive advantage.”

Google, as expected, vehemently denied these accusations, stating categorically that its does not ‘whitelist’ or ‘blacklist’ anyone. However, Matt Cutts, the head of Google’s webspam team, has subsequently told a Silicon Valley conference that Google does use “exception lists” that prevent certain algorithms from affecting certain sites. There is no global whitelist, Cutts said, but for some algorithms, Google will make an exception for sites it believes have been wrongly demoted on its search pages.

Where the FTC investigation will go from here is unclear.

One suspects, however, that there may yet be a few skeletons dragged out of some dark cupboards somewhere down the line. We probably know more about Google’s practices now than we have ever done, but most of that has been forced out by the investigations in the EU. Who knows what the FTC will unearth?

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